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The meeting, unusually low profile for a visiting Israeli leader, was held a day after Netanyahu struck a defiant note in the face of fresh US criticism of Jewish home construction in a part of the occupied West Bank annexed to Jerusalem.
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In a sign of lingering tensions, the Obama administration withheld from Netanyahu some of the usual trappings of a White House visit. Press coverage of the Oval Office talks was barred, and the leaders made no public statements afterward.
During an unusually testy three-day stay in Washington, Netanyahu, under pressure from members of his right-leaning coalition, showed no intention of backing down on settlement construction on occupied land in and around Jerusalem.
His talks with Obama coincided with new reports in Israeli media that Israel's Jerusalem municipality had given final approval for a Jewish housing project announced last July.
Before seeing Obama, Netanyahu told US lawmakers he feared peace talks, suspended since December 2008, may be delayed for another year unless Palestinians drop their demand for a full freeze on Jewish settlements.
"We must not be trapped by an illogical and unreasonable demand," Netanyahu said during a meeting with congressional leaders, according to his spokesman.
Palestinian officials said it was Netanyahu's policy that was keeping the peace process in limbo.